Aslef, the train driver's union, wants a four-day working week for its members and has already rejected a cash lump sum of £500. Talks are ongoing, but the union hasn't ruled out strike action.
Nick Brown, London Underground's chief operating officer, said:
As is the case for many organisations, both private and public, the current economic climate means that there remains considerable pressure on our finances.
We have therefore begun and will continue, discussions with our trade union colleagues on a new pay agreement that is affordable, sustainable and fair.
The first 24-hour Tube is scheduled to run on 12 September. The Night Tube will run six services an hour after 10pm on Fridays and Saturdays on the Jubilee, Victoria, Piccadilly and Central lines, and eight trains an hour on the Northern line.
Mick Cash, head of the Rail Maritime and Transport workers union said:
The RMT’s executive will be considering the next steps in pursuing a deal which properly rewards the workforce and all options remain open in that campaign.
Last year, Boris Johnson estimated the switch to a 24-hour network will create 2,000 jobs and grow the London economy by £360m.